Welcome Guest. Register Now!  


Itemized Deductions Schedule-A


Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 02-29-2008, 12:40 AM
Junior Member
 
Join Date: Feb 2008
Posts: 1
Advisory fee deduction?

My tax preparer & my financial planner are arguing over advisory fees as deductions. My tax preparer says that any advisory fee taken from an IRA account is not deductable, but a fee taken from a brokerage account is. My financial planner says that ALL of her fees are tax deuctable, regardless of which account they were pulled from.

I trust both of them. Who is right?

Sorry if this question has been asked already.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 02-29-2008, 10:33 AM
TaxGuru's Avatar
Tax Guru
 
Join Date: Jan 2007
Location: New Jersey, USA
Posts: 2,417
Blog Entries: 3
Are Financial Advisory Fee's Deductible on the Tax Return?

Actually, I agree with your accountant for the following reason! The IRS Code section states specifically that "Fees paid from the IRA to the investment advisor are not considered distributions of income and are not deductible for personal income tax purposes."

However, the IRS Code states that "if the owner of the account pays the fees directly with personal funds, they are deductible on Schedule A as a miscellaneous deduction subject to the 2% limitation."

The IRS wants the "IRA trustee or custodial fees" to be paid directly out of your own pocket in order to qualify as a miscellaneous itemized expense deductible."

Thus, it would be beneficial to you to directly pay for the advisory fees directly out of your brokerage account in order to obtain a deduction on your Schedule A, as a miscellaneous deduction subject to the 2% limitation.

__________________
Find a CPA near you!

Ask TaxGuru Please refer to the legal disclaimer.


Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Entire CPA fee deductible business expense for amended return? ripples Sole-Proprietorship 4 02-24-2008 10:44 PM
Franchise fee hollisdaniel Itemized Deductions 1 02-17-2008 11:42 AM
IRS Selects New Members for Information Reporting Program Advisory Committee Samatg Tax News 0 01-20-2007 02:10 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.